The integration of optical images and elevation data is of great importance for 3D-assisted mapping applications. Very high resolution (VHR) satellite images provide ideal geo-data for mapping building information. Since buildings are inherently elevated objects, these images need to be co-registered with their elevation data for reliable building detection results. However, accurate co-registration is extremely difficult for off-nadir VHR images acquired over dense urban areas. Therefore, this research proposes a Disparity-Based Elevation Co-Registration (DECR) method for generating a Line-of-Sight Digital Surface Model (LoS-DSM) to efficiently achieve image-elevation data co-registration with pixel-level accuracy. Relative to the traditional photogrammetric approach, the RMSE value of the derived elevations is found to be less than 2 pixels. The applicability of the DECR method is demonstrated through elevation-based building detection (EBD) in a challenging dense urban area. The quality of the detection result is found to be more than 90%. Additionally, the detected objects were geo-referenced successfully to their correct ground locations to allow direct integration with other maps. In comparison to the original LoS-DSM development algorithm, the DECR algorithm is more efficient by reducing the calculation steps, preserving the co-registration accuracy, and minimizing the need for elevation normalization in dense urban areas.